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CHICAGO-Waterton Residential, an affiliate of Chicago-based Waterton Associates LLC, has purchased the Presidential Tower apartment complex from the Pritzker family. The four 50-story apartment towers are located on a 5.8-acre lot surrounded by Madison, Des Plaines, Monroe and Clinton streets. Waterton purchased the property for approximately $470 million, says Mark Stern, senior vice president of acquisitions for Waterton. Stern said he could not disclose a cap rate.
The four towers have a total of 2,346 apartments with studio, convertible, one-bedroom and two-bedroom units. About 7% of the units are currently vacant, Stern tells GlobeSt.com. The average rent for the apartments is $1,300 with an average size of 655 sf, Stern says. Approximately 10% of the units are furnished corporate rentals and guest suites.
The towers also have a five-story parking garage with 1,159 spaces and more than 100,000 sf of commercial space. There are a variety of retailers in the building including a 20,000-sf health club, salon, florist, dentist, grocery store, restaurants, dry cleaner and coffee shop. Potbelly's Sandwich Shop recently signed a 10-year lease, Stern says. The lease was signed before the sale to Waterton, he says. Stern could not disclose the lease rate.
The apartment towers were completed in 1986. The Pritzker family gained control of the Presidential Towers when they were about to be foreclosed in 1995. The towers have not had significant improvements done to them since the building was constructed, Stern says. Renovations are planned to the apartment units such as upgrades to the flooring and lighting and new appliances and renovations to the bathrooms and kitchens. Stern would not disclose an estimate for the renovations. Renovations will also be done to the lobby and other common areas, the parking garage and the retail and commercial area.
"When Presidential Towers was built, it was really built as a self-contained village," Stern says. Many of the retailers do not have street access. "Twenty years later, the West Loop has changed so much. We are going to come in and really open up the retail and make it more street friendly."
The company also purchased two other properties in Chicago in the past year; 1 E. Delaware Place in Chicago, a 36-story apartment complex from Archstone in the city's Gold Coast neighborhood at the corner of North State Street and East Delaware Street, and the 399-unit River North Park Apartments in Chicago in May 2006 from Archstone.
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